The nature of establishment opinion

When elites get it wrong

MISPLACED schadenfreude or a well-earned lap of honour: whatever you make of the "we told you so" journalism generated in recent months by long-time sceptics of the euro, there has been lots of it. What there hasn't been is a more systematic account of the failure of elite thinking on the issue that took place in Britain over a decade ago. Peter Oborne's cover essay in this week's Spectator is a punchy effort to fill this gap.

It evokes a dangerously complacent, fin de siècle Britain in which the upper reaches of the media, business and political classes saw entry to the single currency as the most eminent common sense, and opposition to it as proof of idiocy, populism or bigotry. If Mr Oborne overstates his case, it is not by very much. I first became interested in politics at around that time and recall vividly that in my then newspaper of choice the term "eurosceptic" would often be partnered with a phrase such as "swivel-eyed" or "foaming at the mouth" in the same sub-clause, even though, by any measure of public opinion, it was far stranger to be pro-euro.

The essay is fascinating because it suggests two broader questions: when else have elites got it wrong? And why do such clever, experienced people make such bad mistakes?

Let's start with the first question. British elites have been very wrong about something very important in each of the last three decades. First, in the 1980s, it was Thatcherism. Privatisation, flexible labour markets and non-punitive tax rates are the common sense of our times, but Thatcherism was, at least at the turn of the 1980s, disdained by much of the British establishment as a transient fad propagated by a crazed fishwife from Grantham. Tory "wets" such as Ian Gilmour and Jim Prior were in line with the thinking of the civil service, the Confederation of British Industry, the universities and much of the high-brow media. It's not that these elites were left-wing; indeed, they were truer conservatives (with a small "c" ) than Margaret Thatcher herself. They thought that Britain was a declining nation that could do no more than tinker with the spluttering corporatism of the 1970s. They were wrong.

Then, in the 1990s, there was the issue of crime. It is a well-worn story that for decades each new home secretary would receive the same grim induction by his senior civil servants. The mandarins would produce a chart showing crime rising since the 1960s, explain that this growing blight was an inescapable fact of modernity and inform the cabinet minister that his job was merely to manage public expectations about what the police and the criminal justice system could achieve. Such fatalism was shared by many in the judiciary, the criminological community, the political parties and, again, the smarter end of Fleet Street.

Then came Michael Howard in 1993. He was the first home secretary to ignore Whitehall's advice. He turned the Home Office into a crime-fighting department: mandatory sentences, expanded prisons, the works. Crime began to fall in the mid-1990s, and has continued to fall since under a succession of Howard-esque home secretaries. (The job used to be filled by patrician sorts such as Douglas Hurd.) Now, you don't have to accept that crime fell because of Mr Howard's reforms to see that the elites were wrong. Whether because of tougher policies or underlying social trends (or, most likely, both) crime did exactly what respectable opinion was certain it could not do. It fell.

Finally, in the last decade, the elites got it badly wrong on the euro. (I say the last decade because, although the currency was launched in 1999, it was not until it had settled down a few years later that elite opinion in Britain grew really confident that it was A Good Thing.)

Now, of course, there are qualifications to all this. The elites are not a monolithic group. There were people at the top of the British power structure who supported Thatcherism (including Mrs Thatcher, obviously) and resisted the euro, such as Gordon Brown. And the elites have been right about much. Most fashionable opinion was sceptical about the war in Iraq, for example. However, so was at least half of public opinion; the point about issues such as crime and the euro was that the masses and the elites took such different views, and the masses were vindicated.

Caveats aside, these three misjudgments in recent decades are rather damning. They have also had political consequences that might not be obvious to you. Paul Goodman, a former Tory MP and now an astute observer of the party from his perch at ConservativeHome, argues that what traditionally determined whether someone was on the left or the right of the Conservative Party was his attitude to establishment opinion.

If you generally deferred to it, you were on the One Nation left, perhaps a member of the Tory Reform Group. If you were generally wary of elite consensus on a given issue, you were a right-winger. Mr Goodman points out that successive humiliations over issues such as Thatcherism and the euro have sapped the old Tory left of members and morale. Bar the occasional Damian Green or Ken Clarke, few Tory MPs would define themselves as being on the left of the party. (There are several "modernisers", not least David Cameron and George Osborne, but, if you'll forgive this detour into Tory theology, that is not the same thing at all. Modernisers are generally much more eurosceptic, Thatcherite and hardline on crime than old Tory left-wingers.)

Finally, let me address the second of the questions I posed earlier. Why do elites (people who almost by definition are well-informed and practised in important decision-making) get it wrong? A shallow, though correct and often neglected, answer is that judgement is a completely different mental faculty to intelligence or experience. Clever people can analyse an issue forensically but draw the wrong conclusion. Stupid people can do no analysis at all but still arrive at a sound judgement through sheer instinct.

But we need a fuller answer than that, and a persuasive one is proffered by Stephan Shakespeare, the head of YouGov, a polling firm. As well as measuring opinion for a living, Mr Shakespeare is interested in the underlying science of opinion: how humans come to think what they think. Informed by scientific source material, and his own experiences as a pollster, he has begun to espouse what I will call (in anticipation that it gets turned into a Zeitgeist-y book before long) Shakespeare's Law. This is the theory that humans basically don't care about being right. We are hard-wired to hold opinions that align ourselves with a crowd (not always the majority crowd, though that is the strongest impulse). We are not hard-wired to form opinions through coldly objective and impersonal analysis. We do not feel much better for having been proven right about something. On the other hand, we receive a dopamine boost when we shift our opinion from a minority view to a majority view.

If you accept Shakespeare's Law, the flaws in elite thinking are easier to account for. The "crowd" that Mr Shakespeare speaks of does not necessarily denote the public as a whole, but the social network of a given person. The social network of a member of the elite consists of other members of the elite. Journalists, politicians, mandarins and businessmen tend to mix among themselves, not with Everyman. The social (or, more accurately, neurological and psychological) pressure to agree with one's peers applies even to this tribe of hyper-educated people. They adopt opinions that align themselves with their peers, which in 1981 meant disdain for Mrs Thatcher and in 2001 support for the euro. Opinions that literally make them feel good. Rigorous analysis has little to do with it, even if they sincerely believe otherwise. This lack of rigour means that the opinions carry a strong risk of being wrong. Basic flaws and inconsistencies in their opinion go unexamined because, after all, being right is, whether they realise it or not, not their priority.

Of course Shakespeare's Law also applies to hoi polloi. Their views are just as moulded by an impulse to belong. But they don't purport to be all-seeing elders, and they don't have the levers of power at their finger tips.

Why do elites (people who almost by definition are well-informed and practised in important decision-making) get it wrong?

The obvious answer to this question is that elites do not get it wrong.

Nor do they get it right.

There are no “right” and “wrong”. Any theory predicated on the existence of “right” and “wrong” is as useful as a theory of physics predicated on the existence of the Ether.

If there were “right” and “wrong” policies, then government would be a trivial matter of determining what they were and implementing them. A panel of logic professors taking evidence from universally-acknowledged experts would make the necessary deductions and publish the results. The whole process might even be turned over to a computer. We could save money by abolishing all legislatures and law courts.

The gobbledegook nature of this article may be seen by examining the examples used. As evidenced by some of the comments above, the issues which were contentious then are contentious now. There still people who believe that Thatcherism (itself a term so broad as to be almost useless) was fundamentally “wrong”: that the benefit of any economic efficiency improvements was more than offset by the costs of social disharmony and growing inequality. There are still people who believe that the approach to crime is “wrong” because it has led to overcrowded prisons. There are still people who believe that the Euro was “right” and is “right”: that the long run benefits will outweigh the present transition costs. There are still people who hold unshakable opinions on both the “rightness” and the “wrongness” of the Iraq war.

What has changed in each case is prevailing opinion. But prevailing opinion doesn’t make something “right” or “wrong”. That is an argumentum ad populum.

All matters of policy are matters of preference, and consequently lie beyond the realm of “right” and “wrong”. The relevant issues are:

a) how are conflicting preferences to be aggregated (i.e. what “aggregation device” is to be used)? and

b) how is the aggregation device to be chosen.

There is an infinite variety of devices by which individuals’ preferences may be aggregated into a government policy.

If one lives in North Korea the relevant preferences are those of the ruling clique, and all others are discarded.

If one lives in China the relevant preferences are those of the Party seniors. An individual might join the Party and spend years working his or her way up through the echelons in the hope of one day reaching that rank and having his or her preferences reflected in policy.

If one lives in Britain the relevant preferences are those of the Cabinet members (rubber-stamped by parliamentary backbenchers who are themselves bribed with the promise of future Cabinet appointment if they do as they're told), and Cabinet is itself chosen from a duopoly of political parties every few years. As in China, an individual might join one of the parties and spend years working his or her way up through the echelons in the hope of one day reaching Cabinet rank.

If one lives in the United States the relevant preferences are those of the members of the party duopoly who are elected to Congress, overlaid by the veto of a judicial oligarchy of elite lawyers appointed for a life term to the bench of the Supreme Court.

If one lives in Switzerland, the relevant preferences are those of party members drawn from a range of parties under proportional representation, overlaid by those of people as a whole on any matter attracting enough support to be put to a referendum.

Moreover, there is no self-evidently “right” aggregation device. If this article serves any purpose at all, it is to highlight that the aggregation device of elite rule does not produce self-evidently “right” outcomes, or even the "best possible" outcomes (as some apologists seem to argue). But it goes no further. It fails to show how an aggregation device might be chosen.

The choice of aggregation device is itself a matter of preference, and the challenge is how to aggregate conflicting preferences on aggregation devices in the absence of a chosen device with which to aggregate those preferences.

I'm sorry, but this is nonsense. It's certainly one of the worst articles I've read in months on this website.

- Who or what are these "elites"? Is there an objective way to define "an elite"?
- What does getting it wrong/right mean exactly? How do you measure it in an objective way?
- How many times did they get it right?
- How does their succes rate compare with control groups ("the masses", economists, reporters ...)
- etc. etc.

The British "masses" are largely hostile to the UK's adoption of the euro in principle, not wanting to lose the pound for the same reasons they don't want to lose pints or miles.

Those members of the "elite" who opposed British membership of the euro-zone on detailed economic grounds may have cause to feel vindicated. Those who would oppose it even if it was a huge success do not.

In addition, the "masses" who oppose UK membership of the euro-zone also largely oppose UK membership of the European Union. Do you accept that the "masses" are wrong and the "elite" is right on that question? The Economist frequently pours scorn on those who believe that the UK should leave the EU.

Do you also believe that the "masses" are wrong and the "elite" is right on immigration? This is another area where The Economist consistently tells politicians to ignore the views of the voters.

Likewise, on law and order, are the "elite" wrong to oppose the return of capital and corporal punishment? Again, The Economist regularly rubbishes the views of the "masses".

Political opinions are just like fashion. The elite are defined by the trendiness of their ideas, they have the cutting edge product. New ideas are also usually wrong. Ideas that have worked for a couple decades or centuries are usually right.

For the same reason, the fashion elite of the past usually look really really stupid today.

Actually, political ideas often ARE fashion products, you can't take a step without tripping over something "Green", "Local", "Organic", "Fair-Trade", "Sweat-Free", or "Made in America".

For those who prefer logical solutions to such problems, there is one available.

It may be observed that, for an arbitrary set of individuals choosing an aggregation device:

a) there is no known principle by which to identify individuals whose preferences are to be privileged a priori over those of others in the set. (Although many people believe that their own preferences ought to be privileged, such a belief is itself a matter of preference which invites the recursive problem of how to aggregate it with those of other people who believe that their own preferences ought to be privileged); and

b) the only means of aggregating preferences without privileging some of them is to privilege none of them.

We could say that non-privileging devices are the eigenfunction for preference aggregation in the absence of (logically indefensible) a priori privileging: they are the only solutions which do not require the doing of something that is logically impossible to do (i.e. identifying a priori privileged individuals).

What do such devices look like? We can identify some necessary characteristics:

a) the votes for and against any option must be weighted equally (to avoid privileging some individuals by giving their votes greater weight);

b) the options to be voted upon must not be pre- or post-vetted by some privileged group (to prevent a privileged group vetoing viable options); and

c) the order in which options are eliminated must not be controllable by a privileged group (which in turn requires an indefinite-pass system, because any definite-pass system either could be manipulated in the final pass by those who control the order of elimination, or would collapse into a de facto lottery - which would privilege a priori those who prefer the choice to be made by lottery over those who do not).

We can see that these conditions describe an initiative-and-referendum system. The eigenfunction is itself one of the possible systems of government!

What form of government might such a device choose? I don’t know. God hasn’t granted me a Monopoly on Wisdom in this area. It might very well choose to prohibit or restrict initiative-and-referendum. It might choose a dictator, or a oligarchy, or a (so-called) “representative” system. It might even choose a lottery. More plausibly it might choose some hybrid combining elements of each of these.

What we do know as a matter of historical record is that:

a) in most jurisdictions people have never been permitted to choose their preferred form of government in such a process (i.e. in which the options have not been pre-vetted by self-serving politicians organised into powerful parties, determined at all costs to maintain their collective monopoly on power);

b) where people have been permitted to choose (most famously in Switzerland, but to a limited extent in some US states) they have almost invariably chosen to adopt the initiative-and-referendum process as an ongoing part of their government; and

c) where people enjoy the right of initiative-and-referendum, they do not vote to abolish it, even though it is a straightforward exercise to call a referendum for that purpose.

That is not to suggest that such an outcome is the “right” one. That would be as inane as this article. It is, however, the outcome that arises in the absence of (logically indefensible) a priori privileging.

Firstly Michael Howard was entirely wrong about crime - he foolishly wasted alarming amounts of money on prisons that do not have, and never have had, any significant effect on crime (which has fallen mainly for demographic reasons). The present government is trying hard to unscramble this mess.

Secondly the Euro many people (including me) would have been happy to join would have been a very different object from the one we have. The rules were supposed to have been set to exclude Greece, Italy and the like. Once they weren't the project was doomed. I think the Economist pointed this out at the time!

J G, you are mixing supposedly objective assessments of results (they were wrong!) with subjective opinion (mostly your own: you don't like the Euro; you like Thatcher. So anyone who disagrees with you must pejoratively be an "elite")

Whether the Euro is right or wrong for Britain should be a cost/benefit assessment. As Britain didn't actually join, it's a bit hypothetical. The costs and benefits didn't transpire. Most of the population was opposed to Thatcherism at the time: which might define the proponents as an elite, not the other way round. On crime you don't even think there's a need to assess the claim objectively: as far as you are concerned if people think that something is right then objectively it is right. What about Nazi Germany? (Sorry for the inevitable comparison!)

The other comments here mostly show "elite" thinking. They are rational and work from first principles. Their thinking is absolutely "right". Their every conclusion is open to challenge but not definitely "wrong".

However, should the Euro survive (and the jury is very much out at the moment) and accelerate the integration and conversion process, will you publish another article about how some members of the "elite" tend to be visionaries, some 10-to-20 years ahead of their time/compatriots?

J.G., my comment about book royalties was meant as a lighthearted quip, in response to your own, rather than harsh sarcasm. But it suddenly popped into my head: my brief comment had no context for tone, unlike your longer post.

@Stephen Morris
Your system assumes that everyones voice is equally valid. While entirely democratic, it is nonethelss a large assumption which I disagree with. What would be better is a political system that can be generated to prioritise the values of that society and by inference 'elects' its wisest members.

In the US for example it may be a very good idea to give most functional policy elements to technocrats, collections of experts whose task it could be to say balance the budget or create laws that reduce unemployment etc which make recommendations that are more or less accepted by congress and voted into law. Politicians can then concentrate on rhetoric, grand speeches and slagging off the opposition to keep people happy and under the impression that their leaders are useful.

Give the people too much power and you end up with stupid short term laws like 'lets kick out all the immigrants' or 'lets stop tax but spend more' (California) or 'lets ban Islam' (Switzerland) and people like Hitler (who was democratically elected).

Anyway on to the point of the article, its a good article but I question how these ideas which you say were a minority were nonetheless implemented correctly. In each case you say elites thoughts x but trhe givernment did y. For example elites were pro euro but govt didnt join.

Does this actually mean that these 'elites' with pro Euro opinions or anti Thatcherite opinions were potentially a vocal but (relatively) powerless majority? For example the rich retired, think tank members, prominent acdemics and large sections of the media, as pose to the politicians that were actually in charge of said implemented policies.

He forgot to mention that elite opinion tends to support the status quo -- and that it is in their interests to support the status quo. Thus high crime can't be blamed on complacent, lazy timeservers but on socio-economic forces no one can control; and so on. This is why only outsiders can change the system.

"In addition, the "masses" who oppose UK membership of the euro-zone also largely oppose UK membership of the European Union. Do you accept that the "masses" are wrong and the "elite" is right on that question?"

I think it's fairly evident that the author will take the most stereotypically Conservative view on any issue you put up. Anyone who is sufficiently craven to conflate Michael Howard's policies with a global fall in crime rates should be regarded as such.

"A shallow, though correct and often neglected, answer is that judgement is a completely different mental faculty to intelligence or experience. Clever people can analyse an issue forensically but draw the wrong conclusion. Stupid people can do no analysis at all but still arrive at a sound judgement through sheer instinct."

It really isn't that difficult to work out. Most elites never actually experience the real world - they are cocooned from part-time university jobs, or living in run down neighborhoods, or mixing with low educated violent neighbors. So they believe the 'mantra' it is society that is failing these reprobates. Nothing will change until the elites can understand an ancient Greek proverb:

"Most men are bad." Bias of Priene

Those who profess otherwise lack the intellectual rigor to draw the right conclusions.

I think the key - and the scariest part - is how resistant these epistemological cocoons are to empiricism. I'd argue we've got it worse over here with our Fox News-dominated echo chambers. While the tropes found there aren't (ostensibly) driven by elites, its the same phenomenon with the same result.

The Euro was completely illogical from the start. Binding all those different economies together into one currency never made sense. All of the problems that this would cause were foreseen.

The problem was that at the time there were some unpleasant nationalists attacking the whole thing as a foreign plot, and the BNP were still around making (English) patriotism look like racism.

So anyone making a perfectly logical case for retaining the currency (or wanting to retain their democratic right to national self-determination) were denounced as loons; and elite supporters of the Euro looked like high-minded visionaries - rather than European ideologues with a dodgy grasp of economics. Quite ironic really...

As for Thatcher, she wanted to empower people by removing restrictions from business - and thereby their lives. As most of the Tory elite at this point were wealthy patricians who didn't ever face these restrictions (and weren't trying to move up because they were already there), it's not surprising that the public and Mrs Thatcher could see something they could not.

National champions like Thatcher (and Peter Oborne) are much more in tune with voters than the elites want to be - as the public has meritocratic and nationalist views the elite look down on.